October 20, 1993
CLA-2 CO:R:C:T 955118 BCCATEGORY:CLASSIFICATIONTARIFF NO.:4202.92.9015
Peter J. Fitch, Esq.
FITCH, KING & CAFFENTZIS
116 John Street
New York, New York 10038RE: Revocation of HRL 086561, pertaining to the classification of a textile covered vinyl watch folder; jewelry box; similar container; suitable for long term use; HRL 953398
Dear Mr. Fitch:
Recently, we have had the opportunity to review Headquarters Ruling Letter (HRL) 086561, dated June 21, 1990, concerning the classification of a watch folder made of textile and vinyl materials. That ruling was issued to you on behalf of your client. It did not classify the watch folder under a specific tariff provision because of insufficient information regarding its composition, but it set forth that it should be classified by application of General Rule of Interpretation (GRI) 3(b), the rule pertaining to "essential character." We have recently held that a watch folder that is substantially the same as that classified in HRL 086561 is classifiable under heading 4202, HTSUSA, by application of GRI 1. Consequently, as explained below, HRL 086561 must be, and is hereby, revoked.FACTS:
Headquarters Ruling Letter 086561, dated June 21, 1990, held that a textile covered vinyl watch folder should be classified according to GRI 3(b); that is, according to the component material that provides its essential character: "The sample article will be classified as an other made up article of textile material or as an other article of plastic depending upon the component material which provides the essential character." Recently, in HRL 953398, dated September 15, 1993, Customs held that a textile covered watch folder made of cardboard and plastic sheeting is classifiable under subheading 4202.92.9015, HTSUSA, as a textile covered jewelry box, or similar container, of a kind normally sold at retail with its contents. Both watch folders are substantially similar in construction, and both are used in the retail sale of watches.ISSUE:
What is the proper classification of watch folders of the kind at issue in HRL 086561: a textile covered watch folder made of vinyl and used in the retail sale of watches?LAW AND ANALYSIS:
The description of the watch folder classified in HRL 086561 is as follows:
The sample article is described as a pouch or folder for a wrist watch. The folder measures approximately 9 inches long by 5 inches wide when it is open. When folded, it is approximately 2 1/2 inches wide. The exterior consists of a flocked man-made fabric which is covered with a vinyl material. The vinyl backing is visible only upon opening the folder and pulling the back flap away from the folder. Two corners of the outside flap have metal protectors attached.
The description of the watch folder classified in HRL 953398 is as follows:
You described the watch folder as a "[b]lack flocked acrylic velour pouch with plated corners" used as packaging for watches. In fact, it is a container that is more in the nature of a folder designed to hold a watch. It is made of plastic sheeting which has been covered by a (man-made) textile flock material. A cardboard frame has been sewn between two layers of the flocked sheeting material. The top half of the folder folds over the bottom half, covering a pocket into which a watch is placed. The corners of the top flap are covered with brass colored metal protectors. In its open condition, it is 9 1/2 by 4 1/2 inches; folded over, it is 9 1/2 by 2 7/16 inches.
As stated, the watch folder at issue in HRL 086561 was held to be classifiable according to the "essential character" principle of GRI 3(b), while the watch folder at issue in HRL 953398 was classified under heading 4202, HTSUSA, by application of GRI 1. Yet, the descriptions of these watch folders show that they are substantially the same.
Headquarters Ruling Letter 086561 is based on certain findings that are no longer in accordance with Customs view. Therein, Customs stated the following as the basis for its decision:
In the instant case, the watch folder is the type of premium packaging which is given to the purchaser at the point of sale. The container is primarily designed for temporary transportation and storage of an article of jewelry after purchase and up until the time of first use. It is not specially designed or fitted for a particular item of jewelry, nor is it suitable for long-term use. Thus, in our opinion, the term "jewelry box" as set out in Heading 4202, HTSUSA, does not include the sample article.
Thus, the holding of HRL 086561 rests on the above findings concerning: (1) use of the article (only temporary; only up to the time the watch is transported home); (2) special design (not specially designed for a particular item of jewelry); and (3) suitability for long term use (not so suitable).
It is our opinion that the findings of HRL 086561 are erroneous. We conclude here that containers of this type - designed for use in the retail sale of jewelry and similar items - are frequently kept and used after purchase for storage of the item purchased. Also, the watch folders at issue here are, in fact, specially shaped and or fitted to contain the watches that will be placed inside them. Further, we believe that the watch folders are adequately constructed to serve as a protective storage container for the watches (or other item, such as a bracelet or necklace, that might be placed inside). (See HRL 951028, dated March 3, 1993.)
The ruling (HRL 086561) was also based on HRL 086377, dated February 14, 1990, a ruling that classified a ring folder as an other made up article of textile under subheading 6307.90.9050, HTSUSA. The ring folder was made of flocked textile material, cardboard, and plastic. It measured 1 3/4 by 1 3/4 inches when folded closed. It is similar in construction and use to the article classified in HRL 086561, the article at issue here. In concluding that the ring folder is essentially retail packaging and, as such, is a made up textile article classifiable under heading 6307, HTSUSA, Customs stated the following:
Headquarters Ruling Letter 085156, dated November 20, 1989, stated Customs position that containers that are essentially retail packaging, rather than boxes designed for the keeping of jewelry, are classifiable under the appropriate heading pertaining to the materials of which the container is primarily composed. Jewelry boxes that are not merely retail packaging are classifiable under heading 4202, HTSUSA.
It is clear that both HRL 086561 (by extension) and HRL 086377 (directly) are based on the principle expressed in the above quotation from HRL 085156: that jewelry boxes (and similar containers) used as retail packaging are not classifiable under heading 4202, HTSUSA. It is noteworthy that HRL's 086561 and 086377, both 1990 cases, were based on the principle of this 1989 ruling (085156), for it was not until January 1990 that the following amendment to the Explanatory Notes (EN's) for Chapter 42, Harmonized Commodity Description and Coding System, became effective:
The term "jewellery boxes" covers not only boxes specially designed for keeping jewellery, but also similar lidded containers of various dimensions (with or without hinges or fasteners) specially shaped or fitted to contain one or more pieces of jewellery and normally lined with textile material, of the type in which articles of jewellery are presented and sold and which are suitable for long-term use.
This EN makes it clear that jewelry boxes and similar containers used in the presentation and sale of jewelry and similar items are classifiable under heading 4202, HTSUSA. As stated, the amendment did not become effective until January 1990; therefore, HRL 085156 is distinguishable from HRL's 086561 and 086377, which were decided after January 1990. Nonetheless, the principle upon which all three rulings were based - that jewelry boxes (and similar containers) used in the retail sale of jewelry and similar items are not "jewelry boxes" of heading 4202, HTSUSA - is no longer consistent with Customs position.
In HRL 953398, we stated the following regarding the watch folder there classified:
The watch folder at issue is used in the retail sale of a watch and is specially shaped or fitted to contain that watch. The pocket into which the watch is placed and the flap that covers the pocket offer protection for the watch. The watch folder, when handled with ordinary care, is adequately constructed to be suitable for repeated use over a prolonged period of time as a travel or storage folder. Thus, it is suitable for long term use.
The foregoing can be said of the watch folder at issue here. Like the watch folder classified in HRL 953398, the watch folder at issue here should be classified, by application of GRI 1, under subheading 4202.92.9015, HTSUSA.
Consequently, for the following reasons, HRL 086561 is revoked:
1.) Contrary to the statements contained therein and in HRL 086377, jewelry boxes and similar containers used in the retail sale of jewelry and similar articles are susceptible of classification under heading 4202, HTSUSA, as articles (1) frequently used, after purchase, to store and protect the articles purchased with them, (2) specially designed (shaped or fitted) to hold jewelry or similar items, and (3) suitable for long term use; and
2.) contrary to the statements contained in HRL's 086377 and 085156, jewelry boxes and similar containers are not excluded from classification under heading 4202, HTSUSA, simply for the reason that they are used in the retail sale of jewelry and similar items.HOLDING:
The textile covered vinyl watch folders at issue are classifiable under subheading 4202.92.9015, HTSUSA, as textile covered jewelry boxes or similar containers of a kind normally sold at retail with their contents. The applicable duty rate is 20% ad valorem. This notice to you should be considered a revocation of HRL 086561 under 19 CFR 177.9(d)(1).
Sincerely,
John Durant, Director